 "Indian economy had long stopped following the planned model of growth")
As the country moves towards an entirely new regime of long-term planning, it is worth looking at the role that Five Year Plans played in Indian economic journey. In its heydays of 1960s and 1970, Planning Commission was a hub a of all major economic activities.
The country then had not seen the light of liberalisation and government produced and sold almost everything right from airplanes to bread.
The Soviet style socialist economy believed more on setting up big factories and plants that could employ massive number of people. Public sector’s contribution to the country’s GDP was highest.
Those days, experts said, the Planning Commission decided even the state and district where a PSU would be located, the number of employees it would have and so on. Gradually, as the nineties approached and Indian economy moved into an era of liberalisation which was marked by lesser government controls and more freedom to private entrepreneurs, the Commission’s quintessential role in policy making started diminishing.
Nonetheless, it still commanded considerable clout as it wielded control over large chunk of the funds that the Centre allocated to states and also to the line ministries. Since the late 1990s and early 2000s, the Commission transformed itself into a more advisory role and a platform for states to express their voice in front of the Centre and also mediator between various ministries on one hand and between the finance ministry and other ministries on the other hand.
Its role in Centre’s economic policy might have been going down, but the Planning Commission made some very important and vital interventions in the social and infrastructure sectors.
Infact, programmes like JNNURM and National Rural Health Mission (NRHM) are a few examples of how active involvement of the Planning Commission and its whole battery of experts led by the deputy chairman and members helped in shaping up government policies.
A very vital programme of the government, the Rashtriya Krishi Vikas Yojana (RKVY), owns its origins to the concern expressed by states and Centre in one of the meeting of the National Development Council (NDC).
A big blow to the Five Year Plan process was when the Commission was disbanded and was replaced with the new NITI Aayog, which did not have the financial powers that the earlier body exercised.
Also, with the talk of merging of plan and non-plan expenditure, the need for a plan document already vanished.
However, the question that remains to be answered is how would be new regime of a 15-year vision document, to be followed by a seven-year National Development Agenda, which would then be monitored after every three years different from the existing set-up.
As eminent economist and former principle advisor to the Planning Commission Pronab Sen said in the earlier set-up, the approach paper to a five-year-plan acted as a vision statement, while the five-year plans laid down the near term programmes, schemes and strategies which would be adopted to achieve those long-term goals.
This was then monitored at a gap of every two-and-half years. Now, this is being replaced by a 15-year vision statement, followed by a seven-year National Development Agenda, which would then be monitored at an interval of every three years. “From 15-5-2.5 we are moving towards 15-7-3 regime,” Sen said.
Nonetheless, a document that lays down the roadmap for economic, social and strategic path of the country is always welcome as it would help the states and all stakeholders to align their objectives with the wider national goals.
However, the challenge is to make the documents relevant and distinct with very clearly laid down goals, targets and timeframe to achieve them to ensure that the ‘vision statement’ does not loose its relevance in the manner in which the Five Year Plans did during the last few decades.